Proposed Revisions to Balancing Principles ... - National Grid

Proposed Revisions to

Balancing Principles Statement

and Procurement Guidelines

Following Annual Consultation

A Report by National Grid

In accordance with Condition C16 of

its electricity transmission licence

19 February 2009

Information Contact:

Shafqat Ali

Phone: 01926 655980

Mobile: 07879 602814

E-mail: [email protected]

Proposed Revisions to BPS and PGs

19 February 2009 Page 2 of 24

CONTENTS

EXECUTIVE SUMMARY......................................................................................................................3

1 INTRODUCTION ............................................................................................................................4

2 INDUSTRY RESPONSES.............................................................................................................4

2.1 ‘IN-HOUSE’ TECHNICAL CHANGES ...........................................................................................6

2.2 ‘PLAIN ENGLISH’ CHANGES (INCLUDING ‘IN-HOUSE’ TECHNICAL CHANGES) ..........................7

2.3 EXTENSION OF ‘PLAIN ENGLISH’ CHANGES TO OTHER SIMILAR DOCUMENTS ......................10

2.4 INDUSTRY FEEDBACK ON CONSULTATION DOCUMENT ........................................................10

3 PROPOSED WAY FORWARD / RECOMMENDATIONS .....................................................11

APPENDIX A: CONSULTATION DOCUMENT..............................................................................12

APPENDIX B: INDUSTRY RESPONSES RECEIVED..................................................................13

APPENDIX C: MARKED-UP PROCUREMENT GUIDELINES FOR PROPOSED ‘IN-HOUSE’

TECHNICAL CHANGES .............................................................................................................19

APPENDIX D: MARKED-UP BALANCING PRINCIPLES STATEMENT FOR PROPOSED

‘IN-HOUSE’ TECHNICAL CHANGES ......................................................................................20

APPENDIX E: MARKED-UP PROCUREMENT GUIDELINES FOR PROPOSED ‘IN-HOUSE’

TECHNICAL AND ‘PLAIN ENGLISH’ CHANGES .................................................................21

APPENDIX F: MARKED-UP BALANCING PRINCIPLES STATEMENT FOR PROPOSED

‘IN-HOUSE’ TECHNICAL AND ‘PLAIN ENGLISH’ CHANGES ..........................................22

APPENDIX G: MARKED-UP PROCUREMENT GUIDELINES FOR PROPOSED ‘IN-HOUSE’

TECHNICAL AND ‘PLAIN ENGLISH’ CHANGES, INCLUDING POST-CONSULTATION

REVISIONS ...................................................................................................................................23

APPENDIX H: MARKED-UP BALANCING PRINCIPLES STATEMENT FOR PROPOSED

‘IN-HOUSE’ TECHNICAL AND ‘PLAIN ENGLISH’ CHANGES, INCLUDING POST-

CONSULTATION REVISIONS ..................................................................................................24



Executive Summary

National Grid has carried out an annual review of the Balancing Principles

Statement (BPS) and the Procurement Guidelines (PGs). This review has

been conducted in accordance with Standard Condition C16 of National Grid

Electricity Transmission licence.

As a result of the annual review, National Grid proposed changes to the BPS

and the PGs which were published in an industry consultation document on

16 January 2009.

A key aspect of the proposed changes is National grid’s proposal to write the

BPS and the PGs in ‘plain English’. This work has been carried out by an

external organisation that specialises in converting technical documents into

plain English.

Following a 28-day consultation period, the industry responses have been

received by 13 February 2009.

This report provides details of the outcome of the consultation process

undertaken by National Grid.

Recommendation

Following industry consultation, National Grid recommends that the Authority

approves the revised versions of the BPS and the PGs in Appendices G and

H of this report; these versions incorporate both the technical changes and

the ‘plain English’ changes, and include revisions following industry

responses.

If the Authority does not approve the changes highlighted in Appendices G

and H, National Grid recommends that the Authority approves the changes

highlighted in Appendices C and D; these versions only incorporate technical

changes.

Subject to the approval by the Authority by 20th March 2009, the proposed

changes will become effective from 1st April 2009.



1 Introduction

In accordance with its licence obligations under Standard Condition C16 of

the National Grid Electricity Transmission licence, National Grid has consulted

with the industry on the proposed changes to the Balancing Principles

Statement (BPS) and the Procurement Guidelines (PGs).

The consultation document can be found in Appendix A.

National Grid has consulted the industry on two broad types of proposed

changes:

1. ‘In-house’ technical changes which mainly consist of house-keeping

changes and points of clarification but also include some changes that

reflect current practice. These are the type of changes that National

Grid would normally propose as part of the annual review process. The

‘in-house’ technical changes proposed to the PGs and the BPS can be

found in Appendices C and D respectively.

2. ‘Plain English’ changes which aim to improve the readability of the BPS

and the PGs by writing them in a simpler and easier-to-read form.

These changes have been suggested by an external organisation

which specialises in converting technical documents into plain English

documents. The ‘plain English’ changes proposed to the PGs and the

BPS (including the ‘in-house’ technical changes) can be found in

Appendices E and F respectively.

This report provides details of the outcome of the annual consultation process

undertaken by National Grid.

2 Industry Responses

Responses were received from two organisations:

� E.ON

� CIPS Energy Committee1

� BOC Limited

1 The Chartered Institute of Purchasing & Supply (CIPS) Energy Committee



National Grid is disappointed with the response rate given that the

consultation document had been publicised widely within the industry (e.g. via

Operational forum and Demand Side Working Group circulation lists).

However, National Grid recognises that the industry may be preoccupied with

major ongoing industry issues such as the Transmission Access Reform and

Governance Review. National Grid will continue to encourage more industry

engagement in its future consultations.

The individual responses can be found in Appendix B.

A high level summary of industry responses to the consultation questions is

given in Table 1 below.

Table 1

No Consultation Question E.ON CIPS BOC

1

Do you agree that the ‘in-house’ technical

changes proposed to the PGs in Appendix C

should be made?

Y Y

2

Do you agree that the ‘in-house’ technical

changes proposed to the BPS in Appendix D

should be made?

N

3

Do you agree that the ‘plain English’ changes

proposed to the PGs in Appendix E (which

include proposed ‘in-house’ technical

changes) should be made?

N Y

4

Do you agree that the ‘plain English’ changes

proposed to the BPS in Appendix F (which

include proposed ‘in-house’ technical

changes) should be made?

N

5

Do you think that National Grid should extend

the ‘plain English’ approach to other similar

documents? If yes, which other documents

would you like to see written in ‘plain

English’?

N Y

No

response

to specific

questions

but

“applauds

the move

towards

Plain

English”.

The industry responses to these questions can be grouped into the following

three categories:

1. ‘In-house’ technical changes (Q1 and Q2);

2. ‘Plain English’ changes, including the ‘in-house’ technical changes (Q3

and 4);



3. Extension of ‘Plain English’ changes to other similar documents (Q5).

Sections 1.1-1.3 summarise industry responses and National Grid’s response

to industry views.

2.1 ‘In-house’ Technical Changes

Table 2 summarises the key points from the industry responses.

Table 2

E.ON Response CIPS Response

� Agree with the proposed changes to

PGs;

� Duplication of provisions in the BPS

‘provides helpful clarity’ and hence this

duplication should be retained.

� CIPS is ‘in complete agreement with

the house-keeping changes’;

� Important that procedural and policy

documents are kept up to date and

reflect current industry practices;

� National Grid should carry out bi-

annual reviews but must be careful that

the changes do not change the

meaning or intent of the documents.

National Grid’s View:

National Grid notes the support for ‘in-house’ technical changes which are of

house-keeping nature.

With regard to the proposed removal of duplicate provisions in the BPS,

National Grid explained in the consultation document that the duplicate BPS

provisions reside more appropriately in other documents:

� PGs is the document which sets out the kinds of balancing services that

National Grid procures (as stated in paragraph 3(a) of Condition C16) and

provides detailed description of these balancing services;

� Types of Frequency Response are fully defined in the Grid Code.

National Grid considers that the PGs is concerned with what type of balancing

services are procured whilst the BPS is concerned with how these balancing

services are deployed. National Grid considers that this duplication causes

ambiguity regarding the specific purpose of the PGs and the BPS.



National Grid concludes that the proposed removal of duplicate provisions will

improve clarity regarding the purpose of the PGs and the BPS.

2.2 ‘Plain English’ Changes (including ‘in-house’ technical

changes)


Table 3

E.ON Response CIPS Response BOC

� Support the purpose of

using clearer language

in documents that

provide information to

customers;

� Concerned that simpler

language risks altering

the original meaning

e.g.

PGs

1. Replacement of

“Commercial

Ancillary Services

… are agreed

bilaterally” with

“Commercial

Ancillary Services

… are agreed by

negotiation”2.

2. Replacement of

“Where we consider

that no competition

exists (such as the

provision of a

locational service)”

with “If we consider

that there is no

competition”3;

� Welcomes National

Grid’s decision to re-

write PGs and BPS in

plain English, providing

that the re-write does

not change the meaning

of the content;

� Too much industry

jargon / abbreviations

are used in compiling

procedural documents

for the UK energy sector

which makes it hard for

the up and coming

energy buyers to

understand how the

industry is structured,

and, more importantly,

how it works;

� Important that

documents are written

in good English and free

from spelling errors.

� ‘Track changes’ in such

a way that technical,

commercial and

financial changes are

easily distinguishable

from house-keeping and

‘plain English’ changes;

� The next step to ‘plain

English’ version of the

PGs and the BPS

should be to reduce the

length of these

documents; concise

documents are more

likely to be read.

2 PGs, Part C, section 2.1, paragraph 8 3 PGs, Part D, section 1, paragraph 8 4 BPS, Part A, section 1, paragraph 4 5 BPS, p11




BPS

3. Replacement of “a

review of the BPS

will be undertaken

in accordance with

C16 of the

Transmission

Licence” with

“relevant

information and

reports will be

provided to the

Authority in

accordance with

C16 when

undertaking the

review”4;

4. Typos: Replace

“Electricity” with

“Licence”5 and

remove “Licence”6


National Grid notes the support for use of clearer ‘plain English’ language in

the PGs and the BPS and recognises concerns that this has the potential to

impact the original meaning of the content of these documents.

Prior to the publication of the consultation document, National Grid thoroughly

reviewed the ‘plain English’ suggestions made by an external organisation

that specialises in converting technical documents into ‘plain English’. As a

consequence of this rigorous review, not all the suggested changes have

been incorporated in the PGs and the BPS. For example, the suggested

changes that altered the defined terms (e.g. suggested replacement of the

defined term ‘mandatory services’ with ‘compulsory services) have not been

incorporated.

Whilst National Grid acknowledges the potential risks of using simpler

language, we believe that, on balance, easier-to-understand industry

documents will overall be beneficial for the industry; for example, simpler

6 BPS, Part B, section 1, paragraph 1



industry documents may help existing and new services providers gain a

better understanding of the type of services they may be able to offer, which

would ultimately benefit the electricity market and the consumers.

With regard to the specific industry comments and suggestions (numbered 1-

4 in Table 3), National Grid’s views are summarised below:

PGs

1. National Grid agrees that the proposed replacement of “Commercial

Ancillary Services … are agreed bilaterally” with “Commercial Ancillary

Services … are agreed by negotiation” alters the original meaning and

hence this proposed change should not be made. National Grid has

accordingly revised the ‘plain English’ version of the PGs.

2. National Grid notes that the potential circumstances (e.g. locational

service) under which competition may be limited are clearly stated at the

beginning of the section ‘bilateral contracts’ Part D, in section 1, paragraph

5 of the PGs. Consequently, the reference to these potential

circumstances was removed later in this section. However, as suggested

by a respondent, retaining this reference may provide greater clarity, and

National Grid has subsequently revised the ‘plain English’ version of the

PGs.

BPS

3. National Grid has reviewed the original text “We will review this Balancing

Principles Statement, provide the Authority with relevant information in

relation to such review and provide the Authority the relevant reports and

statements in accordance with the relevant provisions of Standard

Condition C16 of the Electricity Transmission Licence“ and the proposed

change “When we review this statement, we will give the Authority relevant

information relating to our review and the relevant reports and statements

in accordance with the relevant provisions of Standard Condition C16 of

the Licence” to replace. National Grid does not consider that the proposed

change alters the intention or the meaning of this paragraph, and

concludes that it is not necessary to remove this proposed change.

4. Typographical errors highlighted by a respondent have been incorporated

in the revised version of the BPS.



The above changes to the proposed revisions to the PGs and the BPS can be

found in Appendices G and H respectively.

2.3 Extension of ‘Plain English’ changes to other similar

documents


Table 4


� Not productive use of

National Grid’s time and

resources

� CIPS recommends

that National Grid

should carry out

similar reviews for all

their documentation.

� Minimise costs by only

undertaking ‘plain English’

changes when other

required changes are

substantive.


National Grid acknowledges industry views summarised above.

As part of its annual consultation process, National Grid reviews the PGs and

the BPS in order to ensure that these documents appropriately reflect the

current practice for procurement and utilisation of the balancing services.

During this process, National Grid also takes the opportunity to provide further

clarity (e.g. via house-keeping changes) and ensure consistency between

these documents. National Grid will continue to do this in future consultations.

With regard to the use of ‘plain English’, National Grid believes that writing

documents in a simpler and easier-to-understand form is the right thing to do

because this will overall be beneficial for the electricity market.

2.4 Industry Feedback on Consultation Document

No feedback was received on the consultation document.



3 Proposed Way Forward / Recommendations

National Grid has carefully considered the industry responses to the changes

proposed by National Grid, and has provided its views at the end of each

relevant subsection in section 3.

As a result of the industry responses, National Grid has, where appropriate,

revised the proposed changes. These changes to the proposed revisions

have been incorporated in PGs and the BPS shown in Appendices G and H

respectively.

National Grid recommends that:

1. The Authority approves the proposed PGs and BPS changes in

Appendices G an H respectively; these proposed changes incorporate

both the ‘in-house’ technical changes and the ‘plain English’ changes;

2. If the Authority does not approve the proposed PGs and BPS changes

in Appendices G an H, then the Authority approves proposed PGs and

BPS changes in Appendices C and D respectively; these proposed

changes only incorporate the ‘in-house’ technical changes.



Appendix A: Consultation Document

Please see a separate document



Appendix B: Industry Responses Received

� E.ON

� CIPS Energy Committee

� BOC limited



Respondent: Paul Jones

Company Name: E.ON UK plc

Does this response contain confidential information?

No

No Question Response

(Y/N)

Rationale

1 Do you agree that the ‘in-

house’ technical changes

proposed to the PGs in

Appendix C should be made

(section 3.1.1)?

Y There are no substantial changes

proposed and we are happy for them to

be made.

2 Do you agree that the ‘in-

house’ technical changes

proposed to the BPS in

Appendix D should be made

(section 3.1.2)?

N Not entirely. Some elements have been

removed to avoid duplication of

provisions contained in other documents. However, duplicating those provisions in

the BPS provides helpful clarity as to how the various documents interact. The

sections that we believe should be

retained are:

Part B, section 4, paragraph 1.

Part C, section 10, paragraphs 1 to 3.

Part D, section 3.1, paragraph 1.

3 Do you agree that the ‘plain

English’ changes proposed

to the PGs in Appendix E

(which include proposed ‘in-

house’ technical changes)

should be made (section

3.2.1)?

N We understand and support the purpose

of using clearer language particularly in

documents that provide information to customers. However, the statements are

technical in nature and the language

often reflects that. Some of the changes that have been proposed appear

somewhat superficial and we are concerned that paraphrasing some of the

provisions in simpler language risks altering the original meaning or making it

less clear. For instance, in Part D, section

1, paragraph 8 the phrase “Where we consider that no competition exists (such

as the provision of a locational service)” is replaced with “If we consider that there is

no competition”. Apart from changing

what appears to be a very clear statement for no apparent reason, a

useful clarification that states the potential circumstances under which

insufficient competition would be deemed to exist is removed.

Elsewhere, in Part C, section 2.1,



No Question Response

(Y/N)

Rationale

paragraph 8 the phrase “Commercial Ancillary Services….are agreed bilaterally”

is replaced with “Commercial Ancillary Services….are agreed by negotiation”.

The first phrase is clear in that the

agreement occurs bilaterally between National Grid and the party concerned

whereas the second phrase could refer to a negotiation between a number of

parties.

4 Do you agree that the ‘plain

English’ changes proposed

to the BPS in Appendix F

(which include proposed ‘in-

house’ technical changes)

should be made (section

3.2.2)?

N For similar reasons as given in response to question 3. For instance in Part A,

section 1, paragraph 4 the wording has

changed from stating that a review of the BPS will be undertaken in accordance

with C16 of the Transmission Licence to simply stating that the relevant

information and reports will be provided

to the Authority in accordance with C16 when undertaking a review. Whilst we do

not expect that the terms of the BPS can override National Grid’s obligations under

the licence, using the plain English

version makes the provisions less precise and less clear.

We also notice that there are a number of

typos contained in the document such as

the word “Electricity” being used instead of “Licence” on page 11 and that the

word “Licence” should be removed before the phrase “not to discriminate” in Part B,

section 1, paragraph 1.

5 Do you think that National

Grid should extend the

‘plain English’ approach to

other similar documents? If

yes, which other documents

would you like to see written

in ‘plain English’ (section

3.2.2)?

N For the reasons given above, we do not believe that it would be a productive use

of National Grid’s time or resources.

6 Do you have any other

comments? N



National Grid

Balancing Services

12 February 2009

Dear Sirs

Licence Condition 16 Annual Consultation – Procurement Guidelines and Balancing

Principles Statement

In response to your consultation document the Chartered Institute of

Purchasing and Supply's Energy Committee welcomes NG's decision to have

the Balancing Principles Statement (BPS) and Procurement Guidelines (PG)

rewritten in plain English, providing that the rewrite does not change the

meaning of the content.

The Energy Committee is of the opinion that too much industry

jargon/abbreviations are used in compiling procedural documents for the UK

energy sector. The use of jargon/abbreviations make it hard for up and

coming energy buyers to understand how the industry is structured and, more

importantly, how it works.

It is important that procedural and policy documents are kept up to date and

reflect current industry practices. Further, it is equally important that

documents are written in good English, free from spelling errors.

Therefore, the Energy Committee is in complete agreement with the house-

keeping changes and would urge NG to review all their documents bi-

annually. Again, NG must be careful that the changes made do not change

the meaning or intent of the document.

In addition the Energy Committee would recommend that NG carryout similar

reviews to all their documentation.



The Chartered Institute of Purchasing and Supply is the leading body for the

purchasing and supply chain profession which represents the interests of over

50,000 buyers in over 20 countries, 28,000 of which are located in the United

Kingdom.

Yours Faithfully

Martin C. Rawlings

On behalf of CIPS Energy Committee



[email from BOC Limited]

Dear Shafqat,

Thank you for the opportunity to comment on the above, and please accept my apologies for

missing last Friday's deadline.

BOC has no specific comments on the minor changes to the substance of the changes

proposed.

BOC applauds the move towards Plain English in NG documents. You also asked for more

general thoughts around this; ours are:

1 Re-writing in plain English clearly takes time, so in the interests of minimising costs (for

NG and for those who wish to comment) they should only be undertaken when there are

substantive changes to the document.

2 Technical/ Commercial/ Financial or other substantive changes need to be clearly

identifiable from Housekeeping/Plain English improvements - the "track changes" facility in

Word is a good way of showing changes easily, perhaps it would be best if two different user-

names were used - one for the substantive changes, one for the presentational. This would

make it easier for commenters to review the substantive changes without neeeding to pay too

much attention to the rest, hence reducing the opportunity to "slip in" unpopular technical

/financial revisions, and improving the response rate for comments.

3 Plain English so far appears to be re-writing Passive clauses in the Active, and reducing

jargon and TLAs. This is great, but only so far as it goes; the next step is to reduce the length

of these documents; a concise document is more likely to be read!

Kind regards

Christopher Webb Commercial Manager - Utilities

DL +44 1709 842218 | Mob +44 7774 448426 BOC Limited| Operations Centre | Bawtry Road | Brinsworth | Rotherham S60 5NT

www.linde.com | [email protected]

Sent from The BOC Group Limited, registered in England and Wales No. 22096, or from its subsidiary, BOC Limited,

registered in England and Wales No. 337663 - members of The Linde Group. Registered office of both companies -

The Priestley Centre, 10 Priestley Road, Surrey Research Park, Guildford, Surrey, GU2 7XY, England.



Appendix C: Marked-up Procurement Guidelines

for Proposed ‘In-house’ Technical Changes




Appendix D: Marked-up Balancing Principles

Statement for Proposed ‘In-house’ Technical

Changes




Appendix E: Marked-up Procurement Guidelines

for Proposed ‘In-house’ Technical and ‘plain

English’ Changes




Appendix F: Marked-up Balancing Principles


and ‘plain English’ Changes




Appendix G: Marked-up Procurement

Guidelines for Proposed ‘In-house’ Technical

and ‘plain English’ Changes, Including Post-

Consultation Revisions




Appendix H: Marked-up Balancing Principles


and ‘plain English’ Changes, Including Post-

Consultation Revisions


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